A Complete Guide About the Flood Insurance

Flooding is a costly disaster which can hit anytime. There is no coverage available for flooding in the standard homeowner’s policy, renters policy or in the commercial property insurance policies. But, for many homeowners, opting for the insurance which gives coverage against the disasters caused by the flood is very much essential.

According to the National Flood Insurance Program, every single person should have a Flood Insurance, especially if their house is located in an area that has a high flood risk. The situation which causes flooding may include- heavy rain, melting snow, severe coastal weather, etc. In fact, a research has also revealed the fact that, most of the claims, regarding to the above mentioned insurance, comes from someone staying in a medium or low risk area.

flood-insurance

What is Flood Insurance?

Flood insurance is a type of policy, which is typically issued with a one-year term covering home and property damage due to flooding. Flood coverage must be purchased as a separate policy as the regular homeowner’s policy doesn’t provide a coverage against flooding.

The basic key for picking the flood insurance policy is to have a clear idea about your personal level of flood risk. This is one of those policies which are generally backed by the government. The whole process is thus, administered by the National Flood Insurance Program (NFIP).

Benefits of Flood Insurance:

There are actually a number of benefits, which are more than enough for you to go for flood insurance and they are…

  • As this insurance policy is generally provided by the government, one can easily get the support an assistance for 24*7.
  • The dedicated agents of the government would always be there for making you understand the policy clearly.
  • Coverage for flooding are generally not provided by the homeowner’s policy, so there is a genuine need for one to go for flood insurance.
  • Most of this insurance policy normally takes 30 days from the date of purchase to go into effect.

What to do if your Home Floods?

This is a situation when you should opt for conducting everything by keeping your mind in a calm condition. As, a decision taken hurriedly at this condition might not bear some result for you in the future.

  • In the event of extreme flooding, you and your family should immediately leave the place and seek for a safer location.
  • Opt for filing an insurance claim by contacting your insurance agent or the insurance company.
  • Before re-entering in your home, don’t forget to make sure that, the building is structurally sound or not. Try to find out if there is any risk, associated with the collapse of the building.
  • Don’t forget to take a note of the things which has been replaced by the insurance company after flooding.

Flood Insurance Zones:

Mainly there are three broad types of insurance zones of the above mentioned insurance. The zones include:

  • High Risk Areas: If your property is located in a special flood zone, where there is a high chance of flood, then it would be better for you to go for the Flood Insurance policy ASAP. Special Flood Hazard Areas are defined as having a 1% or greater chance of flooding in any given year. The outer boundaries of these properties are generally called the Base Flood Elevation. The areas where there is a high risk of occurring a flood are generally denoted with a combination of letter-number, starting with the letters like, ‘A’ or ‘V’.
  • Moderate to Low Risk Areas: These areas have a lower risk of flooding, compared to the other areas. The amount of occurring a flood to these areas always stays between 0.2% and 1% for moderate-risk, and less than 0.2% for low-risk, in a given year. No one, who lives, works or owns a property in these areas are not at all required to have an insurance for protecting them against the disasters of a flood.
  • Undetermined Risk Areas: The areas which falls in this genre are not at all immune to flooding but, have not also been formally regarded as an area where flood can affect. These areas are generally marked with a ‘D’ on the flood risk maps.

The Coverage Area of Flood Insurance:

There is a certain coverage area of the above mentioned insurance, where it can work.

  • It has the capacity of providing a coverage for the building properties, such as- foundation of the building, plumbing system, various house appliances, etc.
  • It also provides a coverage for the valuable items, such as original artworks.
  • This insurance also provides a coverage for clothing, furniture and electronic equipment.

People have always been tended to underestimate the risk which are generally associated with flooding. The hazards may include some serious life risks or risks associated with your property. Unlike most other insurance coverage, your flood insurance policy will cost you the same, no matter from where you get it. The damages caused by floods can actually be huge, so now is the time for you to start the search for finding a proper Flood Insurance that fits your home or business.

About Tina Roth

Get to Know Me Better. Hi, I'm TINA! I am a financial planner, blogger, and freelance writer and digital marketing consultant. The idea of starting a finance blog has been hitting me for long; I took it seriously after falling into a spiral of finance debacles and recovering from it. Here I write about personal finance and money management tips.

One comment

  1. Flooding is never fun. Although I have not had to deal with this on a personal level with my home, I had several ex-coworkers that did have to deal with this, and it’s never easy. Thanks for putting together such a concise guide. I feel that I learned a lot about flood insurance here.

Leave a Reply

Your email address will not be published. Required fields are marked *

*